Unpaid Internships Are Worthless for the Interns

BOSTON (TheStreet) -- As an undergraduate in the late 1990s, I made the decision to transfer halfway through my college career from a private university to a state school.

This decision was motivated partially by finances. Despite having a half-scholarship, a full Pell Grant and a combination of other need- and merit-based financial aid awards, I still could not afford tuition and fees. Additionally, I wanted to do a double major in English and journalism, but my university offered no journalism program and hardly any journalism courses.

After I transferred to a public college, I was disheartened to find that a main requirement of the journalism major was to work a full-time internship during one of my summers. Despite being enrolled in a relatively more affordable school, I still needed to work close to half-time during the school year and full-time during my summers to make ends meet, as I had no parental contribution to my post-secondary education.

I opted to minor in journalism instead, which required the same course load as the major, but only a half-time internship. Even so, I was unable to find a paying internship or an unpaid internship with a flexible enough schedule to allow me to work a second paying job. Since my financial circumstances required I work for money, I wound up graduating without completing this final requirement of my minor.

Now, well over a decade after I got my bachelor's degree, the unpaid internship has become a staple of many undergraduate and even graduate programs across the country.

It is estimated that between 500,000 and 1 million students work internships each year. Of those, approximately 20% are unpaid and offer no academic credit. Other sources suggest that unpaid internships may even be more common. Of all the internships listed on Internships.com in 2010, two-thirds were unpaid.

Proponents of the unpaid internship have boasted that what they lack in financial benefits they compensate for by offering valuable work experience that will make students competitive in the job market once they graduate.

Many disagree.

The Economic Policy Institute argues that unpaid internships not only institutionalize socioeconomic disparities by shutting out students who can't afford to work for free, but that they offer incentives for corporations to take advantage of the system by replacing paid workers with a revolving door of unpaid interns.

"Unpaid work is exploitation," says EPI Vice President Ross Eisenbrey in a blog post. "It is illegal, and colleges and universities should reexamine their role in promoting it."

The EPI's position was validated in June when a federal district judge in New York found Fox Searchlight Pictures guilty of violating minimum wage and overtime laws when it failed to pay production interns who worked on the set of the film Black Swan. In particular, the ruling reinforced that interns should be paid when their work benefits the company and that unpaid internships should not replace the traditional roles of paid staff positions.

In the past couple of years, other high-profile class-action suits have been brought by interns against Heart, Gawker Media and NBC Universal.

A grassroots movement called the Fair Pay Campaign has been pressuring colleges to stop promoting unpaid internships among their students, saying they compound student loan debt (by forcing students to take out more loans to subsidize their unpaid internship) and discriminates against low-income students.

In response to the backlash, some colleges and nonprofits have started implementing their own financial programs to even the playing field.

Washington University in St. Louis, Mo., has an "Unpaid Stipend Program" that offers $25,000 worth of stipends annually to students to work unpaid internships. The nonprofit Great Lakes Higher Education Guaranty Corp. recently awarded a $2.5 million grant to 19 colleges and universities throughout Wisconsin to subsidize the unpaid internships of approximately 1,300 students.

"Often, some students don't have the luxury to participate in unpaid internships because they need to work at a paying job at McDonalds (MCD) or Wal-Mart (WMT) in order to raise enough money to pay their college bills," Amy Kerwin, chief educational opportunity officer of the organization, told The Badger Herald, the independent student newspaper of the University of Wisconsin at Madison.

But where does that leave those students who don't have access to these or similar programs? As it turns out, those who can't afford to work an unpaid internship aren't missing out on much.

According to a survey last year by the National Association of Colleges and Employers, 37% of students who worked as unpaid interns got at least one job offer, compared with 35.2% for those who didn't. Yet 63% of those who had worked a paid internship got at least one job offer after completing their degree. Furthermore, those who had paid internships made the most money on average after graduating: $51,930 a year, as opposed to $35,721 a year for those had worked unpaid internships. In fact, those who didn't work any internship actually made a slightly higher annual salary on average ($37,087) than those who worked unpaid internships.